How Applying for Student Loans Without a Cosigner Can Hurt You

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

student loans without cosigner

A single year at a public, in-state university costs an average of $9,650. Opt for a private school and you’re looking at a bill of over $33,000. With the cost of college skyrocketing, it’s likely you’ll need to use student loans to pay for your education.

Depending on your financial situation, you might not qualify for enough federal student loans to cover the full cost of attendance. In that case, you’ll need another way to fill the gap, such as obtaining private student loans.

However, getting approved for student loans without cosigner assistance can be difficult. If you are trying to get aid on your own, here’s what you should know before applying for a loan.

What is a cosigner?

A cosigner is someone — often a parent, relative, or close friend — who has a stable income and good credit. The cosigner acts a guarantor for the loan. If you fall behind on your payments, your cosigner is responsible for making them instead. When it comes to private student loans, a cosigner is important.

Most federal student loans don’t require a credit check or minimum income. By contrast, private student loans work differently.

Private lenders look at your finances, including your credit score and income, when reviewing your application. As a student, you likely don’t have much income and might not have established a solid credit history. It makes you look like a risky candidate to a private lender. That’s where a cosigner would come in.

Private lenders often will work with you if there’s a cosigner on your loan.

2 ways applying for student loans without cosigner assistance can hurt you

Here are a couple of ways applying for a loan on your own could cost you.

1. You’re less likely to receive a loan

According to a report from MeasureOne, over 92% of undergraduate private student loans had a cosigner in the 2017-2018 academic year to date. Only a small fraction of applications without cosigners are approved for a loan.

Applying for a student loan with a cosigner lessens the risk to the lender. With someone guaranteeing the loan with you, the lender is more confident that the loan will be repaid on time and is more likely to issue you a loan. If you try to apply for a student loan without a cosigner, you might find it difficult, or even impossible, to get a loan.

2. You’ll pay more in interest

Having a cosigner does more than just increase your chances of getting approved for a loan; it can also help reduce your interest rate. Because a cosigner typically has better credit and a higher income, applications with a cosigner can often land a lower rate than if you went on your own.

Even if your application is approved, you could end up paying more in interest over the length of your loan if you don’t have a cosigner. The difference in the interest rate could cost you thousands of dollars over time.

For example, if you were approved on your own for a $25,000 loan at 7.00% interest, you would pay back $9,833 in interest fees over 10 years of repayment. However, if you had a cosigner and qualified for a rate of 6.00%, you’d pay $8,306 in interest. By adding a cosigner to your application, you’d save over $1,500.

Student loan with a cosigner

Student loan without a cosigner

Loan amount

$25,000

$25,000

Interest rate

6.00%

7.00%

Monthly payment

$278

$290

Interest charges

$8,306

$9,833

Total amount repaid

$33,306

$34,833

How to pay for school without a cosigner

Not everyone has a friend or relative who is willing to be a cosigner. Serving as a cosigner is a huge commitment that can have serious consequences, so it’s understandable if someone doesn’t want to cosign a loan with you.

However, not having a cosigner doesn’t mean you have to give up on your education. There are other ways to finance your education:

  1. Explore federal aid: If you’ve exhausted your federal student loan options, contact your school’s financial aid office to inquire about other types of aid. You might be able to qualify for a work-study program to help offset your college costs.
  2. Look for state-offered grants: Many states provide grants to students living and attending school in the area.
  3. Apply for scholarships: There literally are thousands of scholarships available. You can apply for and receive many at once, reducing the amount you need to borrow.
  4. Go to school half time: If you need to earn more money to pay for school, you can go to college half time and work at a part-time job.
  5. Pick up a side hustle: If you have spare time, you can launch a side hustle to earn extra money. A side gig can help cut down on how much you need to borrow.

Financing your education

Applying for student loans without cosigner help can be a costly mistake, but asking someone to be a cosigner shouldn’t be something you do without thinking it through. If you plan on enlisting a friend or relative to act as a cosigner, make sure you ask yourself these five questions.

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.